If you're a business owner in New York City, finding the perfect office space is crucial to the success of your venture. However, the process of planning an office space lease can be overwhelming without a clear roadmap.
In this guide, we will take you through a timeline for planning your office space lease, ensuring a smooth and efficient process that meets your business needs. Let's dive in!
If remaining in your existing space is a realistic (or even preferred) option, it's best to start thinking about a lease renewal 18-24 months in advance of your existing lease expiration.
This early timeframe allows you to consider your options and leverage your bargaining power. The threat of relocating is only credible if you have sufficient time to explore alternative options. Starting early gives you the advantage of negotiating from a position of strength.
To responsibly plan for your lease expiration, it's essential to have a general understanding of the timeline involved. Here's a breakdown of the various stages:
Finding a Space (1 month): Allocate approximately one month to search for and identify potential office spaces that meet your requirements. For larger requirements (and additional decision makers involved), the process of singling out the best building and space can take even longer.
Negotiating Terms and Exchanging Proposals (1-3 months): Once you've identified a suitable space, you'll need to engage in negotiations with the respective landlord or their representatives. This process typically takes anywhere from one to three months, depending on the complexity of the terms and the responsiveness of the parties involved.
Negotiating a Lease Agreement (1-3 months): After agreeing on the major deal terms, you'll enter the lease document negotiation phase, where the landlord's attorney drafts an agreement memorializing the deal terms and passes it along to your attorney for review. During lease negotiations, all of the legal and financial aspects of the lease agreement are discussed and formalized. Allow one to three months for this process, considering the back-and-forth discussions and potential revisions.
Subleases and Landlord's Consent (1-3 months): If you're considering subleasing a space or seeking the landlord's consent for certain modifications to an existing lease, factor in an additional one to three months to secure the necessary approvals and agreements.
Landlord's Work - Modifications (2-3 months) and New Build (6+ months): If your office space requires modifications or a new build-out, keep in mind that the landlord's work will take time. Allocate approximately three months for modifications and six months for a new build-out, depending on the complexity of the project.
Clarify Space Requirements: Clearly define your space requirements, considering factors such as location, building class, space size, amenities, layout, and cost.
Interview Brokers: Engage with commercial real estate brokers who specialize in New York City office space. Interview them to assess their expertise, experience, and suitability for your needs.
Market Education and Space Criteria: Educate yourself about the current market conditions, leasing trends, and availability of comparable alternatives. Align your space criteria and requirements with the market realities.
Tour Spaces and Evaluate Proposals: Visit potential office spaces that meet your criteria and evaluate the value achieved across each one. Consider aspects such as lease terms, rental rates, leasehold improvements, and tenant responsibilities.
Negotiate Terms and Finalize Lease: Engage in negotiations with the landlord or their representatives to finalize the lease terms. Consider enlisting the support of a broker to leverage your alternatives and assess the landlord's costs associated with losing you as a tenant.
Planning your office space lease in New York City requires careful consideration and a well-defined timeline. By starting early, educating yourself about the market, and engaging the right professionals, you can navigate the process smoothly and secure an office space that suits your business needs.
Remember, each step in the timeline plays a vital role in ensuring a successful lease arrangement.
Good luck with your office space planning journey!